IT stocks have been under severe pressure in the last few months. The performance of IT stocks is inversely proportional to the Rupee. When the Rupee falls, IT stocks rise upwards. However, this is not the case this time. Many IT stocks have fallen sharply and have not recovered. IT index sector is at a yearly low and giant stocks like Infosys, TCS, etc. are also near their 52-week low mark. In this article, we list some of the reasons for the fall in the IT sector of India.
Reason for Fall in IT Sector Stocks
· Most of the earnings of the Indian companies are from their global clients. The global markets have been in a downtrend for a long time now. The IT companies have faced the most pressure due to the downfall. Since the global markets are falling, the IT sector is performing directly proportional to it.
· With the rising interest rates in US and European countries, the fear of recession is constantly haunting them. This bearish sentiment has affected the performance of many global companies causing a fall in revenue, sales and growth prospects. Until the clouds of recession clear, IT companies are expected to remain under pressure.
· The Russia-Ukraine war has constantly put global markets under pressure. The rising inflation due to the war is another cause of worry for the market. The global markets have been under pressure since the war started. This fall in global markets due to war has also triggered a fall in the Indian IT markets.
The above mentioned are some of the main reasons for the downfall in the Indian IT stocks. The global sentiment shall further determine the direction of the IT stocks in the coming days. If things get better we may see a good bounce back in these stocks in the coming days.